Suppose you are asked to come up with a (re)location strategy for Natuzzi, resulting in a top-3 of most preferred (direct) investment locations. Which factors should/would you consider and why? At which top-3 of countries would you arrive? Use the information in the exhibits (and possibly information that you find yourself) to motivate your answer.

Investors will tend to take into consideration some important factors before deciding to invest in a foreign country. These factors may vary between the function and efficiency of local market, trade policy and privatization policy, the rules and regulations pertaining to the entry and operations of foreign investors (1)
Considering the fact that firms which engage in FDI face different difficulties like additional costs for operating at distance or costs of uncertainty, there can be some support for John Dunning’s (1977, 1981) eclectic paradigm which states 3 that the investment will take place if the firm has three advantages: Ownership advantages, location advantages and internalization advantages. Possessing all three of them will allow a company to perform better that the local competitors. Natuzzi should relocate production because it wants to reduce costs and the best way to do that is to invest in a lower labor cost country.

Thailand can be considered one of the most attractive locations because is like a gateway to Asia- home to nowadays largest growing economic market. The country can also offer trade with China or other member countries of ASEAN (Association of Southeast Asian Nations). Thailand has advantages in terms of transport costs to the U.S. market. Producing here is equivalent to producing in China in terms of distance between U.S. and Asia but productivity of labor is a lot higher in Thailand although labor cost is a disadvantage. As Natuzzi sells its products mainly in US and Europe